Upbeat news boosts Clean Harbors

Jon Chesto

Thursday

Feb 28, 2008 at 12:01 AMFeb 28, 2008 at 7:41 PM

Shares in Clean Harbors Inc. soared to a new peak after the Norwell environmental services company offered a better-than-expected financial outlook and surprisingly strong results for the quarter that just ended.

The company reported on Wednesday that it earned $16.6 million in the last three months of 2007, a 45 percent increase from its net income in the same time in 2006. Revenue rose by 11 percent to $258 million for the quarter.

Clean Harbors also said it expects its annual revenue will rise by 6 percent to 8 percent in 2008, and that it expects strong earnings growth this year.

The company’s stock climbed by more than 8 percent in particularly heavy trading on Wednesday, to close at $61.98 a share. Its shares have been steadily rising for much of the past four years, and Wednesday’s close represented a new peak for the stock.

Al Kaschalk, an analyst with Wedbush Morgan Securities, said many observers were surprised by the company’s projected growth, considering the weakness in the national economy. “With the economy slowing down, it was hard to think that this type of business could do mid-to-high single digits,” Kaschalk said.

But Kaschalk apparently had faith in the company: He upgraded the stock to a “strong buy” in early January when it was trading around $50 a share, and set a 12-month price target of $64 a share.

Clean Harbors continued on Wednesday to unveil more information about its latest steps toward reaching a long-term goal of becoming a nationwide environmental services provider with at least $1 billion of annual revenue:

The company said it had recently signed agreements to buy two solvent-recycling plants in Chicago and Hebron, Ohio, for $12.5 million. Fewer than 100 people work at the two Safety-Kleen plants, according to Clean Harbors chief financial officer Jim Rutledge. The company said it plans to offer jobs to all employees at plants.

The company added eight service centers in 2007, beating its goal of opening five or six, to expand in the West and in Canada.

Clean Harbors also received about $4 million in revenue, as well as exposure in a high-publicity job, by responding to the oil spill in the San Francisco Bay in November when a container ship struck a bridge in the bay.

The company reported utilization rates of 95 percent at its hazardous-waste incinerators in the U.S. in the past quarter. It is spending as much as $20 million to upgrade its incinerators and improve their overall capacity by 10 percent to keep up with the demand.

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